January 20, 2014

State Auditor blasts Downs contracting process; Balderas finds state fair financial insolvent

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State Auditor Hector Balderas

Late Friday, State Auditor Hector Balderas issued a risk advisory to the State Fair Commission, the state

State Auditor Hector Balderas

commission appointed by Governor Martinez to oversee the state fair and EXPO NM property.   The commission is most known to New Mexicans as the Martinez-appointed board which approved the 25-year multimillion dollar Downs racino lease.

Balderas, in his role as state auditor, found that in addition to the state fair being financially insolvent there were “significant deficiencies” in the awarding of the controversial contract to the team supported by Martinez’s political camp.

From Balderas’ letter to the State Fair Commission:

First, as detailed  in Finding  12-05, the  IPA noted  that the evaluation committee for the Racino RFP was not established prior to the due date for receipt of the  Racino  proposals,  which  is  a violation  of  state procurement  regulation

Agency management has the sole discretion to select evaluation committee members and the selection process should be independent, free from undue influence and consistent with the explicit purposes of the Procurement Code. That Code, specifically Section 13-1-29 NMSA 1978, provides that the “purposes of the Procurement Code are to provide for the fair and equitable treatment of all persons involved in public procurement, to maximize the purchasing value of public funds and to provide safeguards for maintaining a procurement system of quality and integrity.” For these reasons, I am troubled by EXPO’s violations of state procurement requirements related to the evaluation committee

I would recommend these options include a review of the State Fair Commission’s enabling statutes, with an eye towards structural reform of the Commission.  EXPO’s enduring financial problems, in addition to the improper personnel action and Racino evaluation  committee  appointment  deficiencies  cited  in  the  2012  financial  audit,  should provoke debate about the independence and expertise needed for the Commission. The Legislature should also consider options for effective legislative oversight.

Though the report noted several violations of state purchasing regulations, the report did not allege any criminal wrongdoing by any parties involved.

Balderas is a candidate for state Attorney General in 2014.

Read the full report at the Office of State Auditor here. (may open pdf in your browser)